6 Questions Ontario Businesses had About Energy Costs, Answered

Will mandatory reporting and benchmarking apply to small businesses? Why are U.S. energy policy and energy prices important to Ontario?

Those were just a couple of questions that attendees of Bruce Power Direct’s (BPD) webinar asked last week. Titled “Take Control: How to Tame your Energy Costs in a Wild Market,” the 45-minute webinar saw my BPD colleagues, Chris Loughren, Manager, Commercial Energy, and Kate Bagshaw, Senior Electricity Advisor, explain current market conditions before diving into what businesses can do now to manage the rising cost of energy.

Naturally, attendees had a lot of questions, and we figured we would share some of the questions and the answers—in this week’s blog.

Why are U.S. energy policy and energy prices important to us here in Ontario?

A: Ontario is a huge exporter of energy. With costs rising in the U.S. markets from getting rid of coal—which is a relatively cheap source of energy—we will see continued export demand for electricity from Ontario, especially when the Canadian dollar is so inexpensive. Because we have a lot of hydro and low-cost nuclear energy, it makes financial sense to export to jurisdictions that are south of us with higher prices. However, just like any other commodity more exports means greater demand and higher prices for everyone.

Will mandatory reporting and benchmarking apply to small locations like retail stores and bank branches?

A: At this point, we’re unsure. The government is still drafting regulations, so it’s hard to say if it reporting will get down that low level. The threshold for reporting has already been lowered twice through the course of developing the regulations, so it’s conceivable that reporting will be mandatory for almost everyone. We’re monitoring the regulation closely, but in the meantime, the best thing to do is to stay ahead of the curve by collecting your data and monitoring your usage for your own benefit, as well as the future when regulations may require you to report on your usage.

What should I look for when verifying my utility bills?

A: Make sure your consumption is accurate and that the rates are consistent across time. Track it every month to see if there are any variances from month to month. Make sure your consumption dates aren’t overlapping—meaning the end date of one bill is the start date of another bill. Make sure the rates are consistent across time. Take total cost and total consumption and divide that into a rate, and track that on a monthly basis to look for large variances. (Also, we offer a service that can help with you this at no upfront cost.)

If everyone is reducing their consumption, doesn’t that mean it’s impossible to reduce my costs, because costs will go up anyway?

A: How fast do you need to be to outrun a lion? You don’t need to be faster than the lion—you need to be faster than the slowest member of your group.

The same is true with energy efficiency. If all your competitors are getting more efficient and reducing their consumption, you need to at least match their performance, and to save, you need to be better than they are. Just like any other part of your business.

Will we be using as much energy from gas as we will from wind in Ontario next year?

A: From a simple annual comparison, yes, that is correct. It seems like a simple comparison, but it’s not. Remember that natural gas, being a variable source of supply, would be used when we need it the most. And as a variable source of fuel, we’re held captive to the natural gas price when we need that generation—which can have cost consequences. In winter of 2014 and 2015, gas prices rose due to high demand for heating and prices averaged more than 5 cents a kWh.

Wind is intermittent and ultimately depends on when the wind blows. We can’t really depend on it to make up the difference that coal is leaving behind, but it is certainly becoming a bigger part of the story.

LED lighting is already being installed in our facilities. What else can be done to lower consumption and hopefully lower energy costs?

A: It’s a great start and puts you as a leader of the pack, so to speak. But it’s only the tip of the iceberg. Looking at studies by National Resources Canada and the EPA, companies routinely waste 25-30% of the energy they consume in their facility. It’s wasted energy that is not going to any productive use. An example of this is simultaneous heating and cooling—they are working in contradiction of each other. Simple data-based checks—like ensuring your overnight or weekend consumption is as low as possible and that there are no unexplained spikes in your consumption—are good ways to conserve energy and create savings for yourself. This is one of the building blocks of an energy-management plan that will put you on the path to sustained energy savings.